UNDERSTAND

Public Employees' Retirement System Plan 1 (PERS 1) is a defined benefit retirement plan that provides a secure formula-driven income for retirement.

PERS 1 is no longer open to new participants.

Participation in the PERS 1 retirement plan starts on your first day of employment in an eligible position. In this 401(a) defined benefit plan, you and the University contribute money that funds your retirement income. Once you retire, you will receive your retirement benefit based on a formula which includes your years of service credit and average final compensation. Here is how it works:

• You contribute 6% of your gross salary. Deductions are tax-deferred. The employee contribution amount is set by state law. Should you leave without retiring, you could withdraw your own contributions plus interest (as set by law).
• The UW contributes to the plan by funding the employer contribution rate, which is currently 5.46% of your gross salary. These monies are not credited to your account and cannot be withdrawn.
• Your contributions along with the UW’s contributions are held in the PERS 1 Retirement Trust Fund, and invested by the Washington State Investment Board.
• Your future retirement benefit defined by the defined benefit formula used to calculate your benefit, and has no relationship at all to the amount that either you or the UW contributed to the plan.

Eligibility

PERS 1 participation is limited to :

• contract classified, classified non-union and GCIU bargaining unit employees, whether permanent or temporary, who are prior or continuing plan members with established membership before October 1, 1977, and
• are working a minimum of 70 hours per month in any five months of a 12-month period.

Temporary Employees: If you are a temporary employee you may become eligible to participate in the Public Employees Retirement System (PERS) if:

• You are offered a work schedule in writing that requires five months of 70 or more work hours in a 12-month period. PERS eligibility will begin on your first day of assignment.
• You complete five months of 70 or more hours of work in a 12-month period enrollment in PERS occurs following the completion of the fifth month.

Newly Eligible Employees: If you participated in an employer-matched, defined contribution, basic retirement plan with your prior employer, you may be eligible to participate in the University of Washington Retirement Plan (UWRP) instead of the Public Employees Retirement System (PERS). Learn more.

Changing positions at the UW? If you move from a PERS-eligible position to a UWRP-eligible position or vice versa, email Benefits & Work/Life at benefits@u.washington.edu to determine your retirement plan choices.

Staff who are full-time UW students or the spouse of a full-time UW student: If you are a full-time UW student or the spouse of a full-time UW student, you may be eligible to exempt yourself from participation in PERS. However such exemption will not count toward future retirement service credits. Email Benefits & Work/Life at benefits@u.washington.edu to learn about exemptions from PERS participation.

All UW employees participate in their applicable retirement plan from the beginning of employment. Retirement plan participation is a condition of employment.

If you are in a PERS-eligible position, but you were participating in an employer-matched, defined contribution, basic retirement plan with your prior employer, you may be eligible to participate in the University of Washington Retirement Plan (UWRP) instead of the Public Employees Retirement System (PERS). An employer-matched plan is one in which both you and your employer make contributions to your basic retirement plan, such as a 401(k) or 403(b) plan.
To be eligible for UWRP you must have:

• participated in the employer-matched, defined contribution plan for at least 2 full years and
• contributed immediately prior to coming to the UW (within 90 days),
• have become eligible for PERS immediately upon hire at UW;
• had this plan participation with one of the 3 UWRP fund sponsors: Fidelity, TIAA-CREF, or Vanguard, and
• the funds still in the account at one of the fund sponsors listed above.

If you believe you meet this exception criteria, email the Benefits & Work/Life Office to determine your retirement plan choices.

Calculating Your PERS 1 Retirement Benefits

Monthly retirement income = 2% x service credit years x average final compensation ÷ 12 months where your average final compensation is the monthly average of your 24 consecutive highest-paid service credit months.

Example
Suppose you retire at age 60 with 29.5 service credit years. Your average final compensation is $27,000. Your monthly retirement benefit will be $1,327.
2% x 29.5 years x $27,000 ÷ 12 months = $1,327

This calculation results in the standard benefit. It will be lower if you choose to continue benefits to a survivor upon your death.

In addition:

• The amount of service credit that will count towards your benefit is limited to 30 years (or a 60% benefit),
• If you are a member of more than one State of Washington retirement plan, you may be able to combine service credit from all the plans to qualify for retirement. For more information about this portability, contact the Department of Retirement Systems (DRS).
• You may receive up to five service credit years for time in the U.S. armed forces that interrupted your PERS 1 membership. If you have 25 PERS 1 service credit years, you may be eligible to receive credit for military time that did not interrupt PERS membership.
• Disability retirement and survivor benefits are available if you meet the requirements.

ACT

Enrollment in PERS 1 is automatic upon eligibility and confirmation of past PERS 1 employment. You may wish to update your beneficiary as needed.

Leaving the University Before Retirement

If you leave PERS 1 eligible employment before you retire, you may withdraw or transfer your employee contributions plus interest, subject to any applicable taxes or penalties. Processing a withdrawal is managed by the Department of Retirement Systems.

You cannot withdraw or transfer your employee contributions if you are moving directly to a PERS-eligible position with another employer.

Your choices are:

• Withdraw your money plus interest. Withdrawals are subject to the IRS 20% withholding tax. The IRS may also require that you pay a 10% penalty.
• Transfer 100% or a designated amount of your money to a qualified retirement account. no withholding tax is required on funds that are directly transferred, nor does the 10% penalty apply.
• Leave your money in the retirement fund. Your service credit will be preserved for you in the event you return to State of Washington employment. When you have a minimum of 5 years of service credit, you have a vested right to a retirement benefit when you meet PERS 1 age requirements. Vesting means you have earned the right to a future benefit even if your covered employment ends. Your funds will continue to accrue interest.

If you withdraw your contributions before retirement, you lose your right to future retirement benefits. You can restore your contributions and re-establish your benefits under certain circumstances. Explore the PERS 1 website for more information including member publications

LEARN MORE

Contact the Social Security Office periodically to review your file's accuracy.

Refer to the PERS Plan 1 Member Handbook.

See the Department of Retirement Systems 2005 Summary Annual Financial Report.

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